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The maximum incremental social tolerable irreversible costs (MISTICs) and other benefits and costs of introducing transgenic maize in the EU-15

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  • Wesseler, Justus
  • Scatasta, Sara
  • Nillesen, Eleonora

Abstract

The decision to release a new transgenic crop variety for planting in the European Union (EU) is a decision under irreversibility and uncertainty. We use a real option model to assess the ex-ante incremental benefits and costs of the decision to release Bt maize and HT maize in the EU-15 member states. The analysis uses Eurostat data for modelling the benefits and costs of non-transgenic maize using partial equilibrium models. The farm-level benefits and costs of Bt maize and HT maize are derived from field trials conducted within the EU-funded ECOGEN project in combination with secondary data sources. Adoption curves, hurdle rates and Maximum Incremental Social Tolerable Irreversible Costs (MISTICs) are calculated at country level for selected EU-15 member states. In general, the results show that the MISTICs on a per capita level are very small confirming previous results calculated in values for the year 1995. The MISTICs per farm are much larger. This indicates a problem for decision makers.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 33229.

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Date of creation: 11 Apr 2007
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Handle: RePEc:pra:mprapa:33229

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Related research

Keywords: agriculture policy; biotechnology; GMOs; MISTICs; technical change;

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  1. Alex Winter-Nelson & Koffi Amegbeto, 1998. "Option Values to Conservation and Agricultural Price Policy: Application to Terrace Construction in Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 80(2), pages 409-418.
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  5. Moschini, GianCarlo & Lapan, Harvey E. & Sobolevsky, Andrei, 2000. "Trading Technology As Well As Final Products: Roundup Ready Soybeans And Welfare Effects In The Soybean Complex," Proceedings:Transitions in Agbiotech: Economics of Strategy and Policy, June 24-25, 1999, Washington, D.C., Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Perfor 26002, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
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  7. Robert Weaver & Justus Wessler, 2004. "Monopolistic pricing power for transgenic crops when technology adopters face irreversible benefits and costs," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 11(15), pages 969-973.
  8. Demont, Matty & Wesseler, Justus & Tollens, Eric, 2002. "Biodiversity Versus Transgenic Sugar Beet: The One Euro Question," Working Papers, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics 31859, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
  9. McDonald, Robert & Siegel, Daniel, 1986. "The Value of Waiting to Invest," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 101(4), pages 707-27, November.
  10. Scatasta, Sara & Wesseler, Justus & Demont, Matty, 2005. "Irreversibility, Uncertainty and the Adoption of Transgenic Crops: the Case of BT-Maize in France," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark, European Association of Agricultural Economists 24758, European Association of Agricultural Economists.
  11. Moschini, GianCarlo & Lapan, Harvey E. & Sobolevsky, Andrei, 2000. "Roundup Ready Soybeans and Welfare Effects in the Soybean Complex," Staff General Research Papers, Iowa State University, Department of Economics 1799, Iowa State University, Department of Economics.
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Citations

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Cited by:
  1. Xianlei Ma & Justus Wesseler & Nico Heerink & Futian Qu, 2013. "Land Tenure Reforms and Land Conservation Investments in China ¨C What Does Real Option Value Theory Tell Us?," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 19-33, August.
  2. Tillie, Pascal & Dillen, Koen & Rodríguez-Cerezo, Emilio, 2014. "Modelling ex-ante the economic and environmental impacts of Genetically Modified Herbicide Tolerant maize cultivation in Europe," Agricultural Systems, Elsevier, Elsevier, vol. 127(C), pages 150-160.
  3. Skevas, Theodoros & Fevereiro, P. & Wesseler, Justus, 2008. "Coping with ex ante Regulations and ex post Liability Rules for Planting Bt-maize – The Portuguese Experience," 2008 International Congress, August 26-29, 2008, Ghent, Belgium, European Association of Agricultural Economists 44189, European Association of Agricultural Economists.
  4. Kikulwe, Enoch M. & Birol, Ekin & Wesseler, Justus & Falck-Zepeda, Jose Benjamin, 2013. "Benefits, costs, and consumer perceptions of the potential introduction of a fungus-resistant banana in Uganda and policy implications," IFPRI book chapters, in: Falck-Zepeda, Jose Benjamin & Gruère, Guillaume P. & Sithole-Niang, Idah (ed.), Genetically modified crops in Africa: Economic and policy lessons from countries south of the Sahara, chapter 4, pages 99-141 International Food Policy Research Institute (IFPRI).
  5. Kovacevic, Vujadin & Wesseler, Justus, 2010. "Cost-effectiveness analysis of algae energy production in the EU," Energy Policy, Elsevier, Elsevier, vol. 38(10), pages 5749-5757, October.
  6. Smyth, Stuart J. & Gusta, Michael & Belcher, Kenneth & Phillips, Peter W.B. & Castle, David, 2011. "Environmental impacts from herbicide tolerant canola production in Western Canada," Agricultural Systems, Elsevier, Elsevier, vol. 104(5), pages 403-410, June.
  7. Skevas, Theodoros & Fevereiro, Pedro & Wesseler, Justus, 2010. "Coexistence regulations and agriculture production: A case study of five Bt maize producers in Portugal," Ecological Economics, Elsevier, Elsevier, vol. 69(12), pages 2402-2408, October.

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